Shares of Nebius sank 16% on Thursday after the AI cloud company, one of the largest publicly traded "neoclouds," issued a cautious full-year revenue outlook and a much higher spending plan, CNBC reported.

The quarter itself beat Wall Street. Revenue was $980.8 million, above the $907.5 million LSEG consensus, and jumped 571%. Adjusted earnings were 31 cents a share, versus an expected loss of 69 cents. The company still reported a net loss of $37.5 million, or 13 cents a share, narrower than a $119.6 million loss, or 50 cents a share, a year earlier. In a letter to shareholders, CEO Arkady Volozh said fiscal 2026 revenue is expected at the low end of the company's $3 billion to $3.4 billion range; analysts had $3.37 billion. The initial 2027 outlook was $12 billion to $13 billion, "reflecting a conservative approach to the pace of our buildout," compared with an LSEG consensus of $11.98 billion.

The spending figures were the shock. Nebius now expects 2026 capital expenditures of $27 billion, above its previous guidance of $20 billion to $25 billion and a FactSet estimate of $23.85 billion. For 2027 it projected $40 billion to $45 billion in capex, far above FactSet's $28.77 billion. During the quarter it raised $5.75 billion in debt. "Capital markets have been unsettled lately," Volozh told analysts. "Two questions are being asked our whole industry, how fast can AI build-out happen, and who will pay for it? ... The demand for AI is real and substantial. Everything else, like building the capacity and financing it, is just a task."

A sector rally, then a hangover

Fellow neoclouds CoreWeave and IREN had reported better-than-expected results, helping a Wednesday rally in which CoreWeave jumped nearly 25%, Nebius climbed 15%, Applied Digital rose more than 7% and IREN added nearly 6%. Those stocks fell in Thursday premarket trading after the Nebius report. Last week, CoreWeave's bond yields spiked past 16%; on Tuesday that company said it expects to keep parent-level debt financing under $5 billion through 2027. CNBC also noted that Nvidia, which has invested in neoclouds, held about $329 million in Nebius shares at the end of June, and that Thursday's move came amid the resignation of Nvidia CEO Jensen Huang. Voters last week also backed dozens of ballot measures to restrict data-center development, adding political uncertainty as the companies race to open new facilities.